Since data regarding the sale of oils has been collected and released by Health Canada, kilograms of cannabis oils sold have been rapidly growing at a much faster pace compared to the growth in dried marijuana sold. Not only that, quarter-over-quarter cannabis oil sales growth is even outpacing the quarter-over-quarter growth in the number of registered patients.
According to the Health Canada website, 22 out of the existing 38 licensed producers currently can produce and/or sell cannabis oils in addition to fresh cannabis. Of the 22 licensed cannabis oil producers/sellers, 15 of them are owned by a publicly traded company.
Why Does This Matter to Current and Prospective LP Investors?
In a space with limited means of differentiation, offering oils can be a great way for a licensed producer to stand out to both physicians and patients. If an LP's products stand out to physicians and patients, we believe this is further reasoning for the companies producing such oils to stand out to investors as well. Not only are oils rising in popularity (signaling a growth sub-sector within cannabis), but the margins on cannabis oils are far higher than that of the dried plant materials. The reasoning for the higher margins is that cannabis oils can be derived from waste parts of the plant that are not commonly smoked (such as the stalks and stems).
The top public companies who can produce oil are as follows:
Canopy Growth Corp. (TSE:WEED, OTCPK:TWMJF)
Aphria, Inc. (CVE:APH, OTCQB:APHQF)
Aurora Cannabis, Inc. (TSX.V:ACB, OTCQB:ACBFF)
Emblem Corp. (CVE:EMC, OTCPK:EMMBF)
Emerald Health Therapeutics (TSX.V:EMH, OTC:TBQBF)
OrganiGram Holdings, Inc. (TSX.V:OGI, OTCQB:OGRMF)
CanniMed Therapeutics (TSE:CMED, OTC:CMMDF)
THC Biomed Intl. Inc. (CNSX:THC, OTCQB:THCBF)
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